India lucrative for firms seeking China alternative

NEW DELHI: With companies looking at a “China-plus one” strategy in wake of the COVID-19 pandemic, India presents an “attractive” opportunity as a manufacturing destination with availability of skilled labour force and young consumer base, a senior HMD Global executive said on Monday.

“There is an ambition of making India a global hub for mobile devices specifically, and what COVID-19 has done has kind of accelerated the process...COVID-19 has driven companies to follow the China-plus one strategy when it comes to manufacturing and supply chain,” HMD Global vice-president — corporate business development Ajey Mehta said at CII’s Horasis India Meeting. HMD Global sells mobile phones under Nokia brand.

“We already have the demographic dividend of a young consumer base. Added to that, India’s low per capita income and the skilled labour makes it a really attractive destination for companies to come in set up units,” Mehta added.

Smartphone usage has gone up by almost two hours per day in India, and data consumption has risen by 30 per cent as people work and study from home.

On collaboration with countries like Vietnam, which is among major manufacturing hubs apart from China, for mobile manufacturing, Mehta said, it is impossible to develop products in isolation from other countries for any industry.

“There needs to be deep collaboration with countries in the supply chain, there needs to be a global supply chain system to deliver products. So even if you’re manufacturing in any one place, you have to rely on other places for the manufacturing,” he added.

Flaws with india

• A report by ICEA-EY had outlined that India needs to have a better policy support
• India also suffers from various disabilities like high cost of power and tax.